City of Culver City, California
Agenda Item Report
Meeting Date: 6/27/11 Item Number: A-3
CITY COUNCIL AGENDA ITEM: Approval of a Memorandum of Understanding with
Santa Monica’s Big Blue Bus to Provide Bus Advertising Services.
Contact Person/Dept.: Samantha M.
Blackshire/Transportation
Phone Number: (310) 253-6535
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – City Council (06/22/11); (E-Mail)
Ongoing Topics – Culver CityBus (06/22/11).
Department Approval:
Art Ida (06/20/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (06/20/11)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (06/22/11)
City Manager Approval:
John M. Nachbar (06/22/11)
RECOMMENDATION:
Staff recommends the City Council approve a two-year Memorandum of
Understanding (MOU), with three additional one year options, with the City of Santa
Monica to manage the Culver CityBus Advertising Program (Program).
BACKGROUND:
The City of Culver City’s Transit Operations Division, known as Culver CityBus
(CCB), is responsible for providing public transit service within the City of Culver City
and surrounding communities. CCB’s friendly bus operators and fleet of 52
Compressed Natural Gas (CNG) buses service approximately 5 million riders
annually over an area encompassing 25.5 square miles. CCB operates 38 fixed
route buses during peak hours along seven routes, plus one rapid route. CCB
serves Culver City and the Westside communities of Blair Hills, CenturyCity, Mar
Vista, Marina Del Rey, Palms, Venice, VeniceBeach, West Los Angeles,
Westchester, and Westwood.
CCB also provides direct connection service to the University of California at Los
Angeles (UCLA), Imperial Highway/Aviation Metro Green Line Station, and the LAX
TransitCenter. Since CCB services the Westside of Los Angeles County, staff
concluded that allowing revenue-generating advertisements on the exterior surfaces
of its buses is a reasonable means of maximizing use of Culver CityBus capital
investments and recommended the City Council direct staff to pursue such a
program. The City Council concurred. City of Culver City, California
Agenda Item Report
DISCUSSION:
Staff initially released RFP #1472 Transit Advertising on Culver CityBus
Buses/Shelters/Benches (RFP #1472) on December 6, 2010. The Transportation
Department received comments and questions regarding RFP #1472 by the December
24, 2010 deadline.
The majority of the questions required an expertise in the area of advertising which
exceeded staff’s knowledge. Therefore, staff considered the possibility of separating
the bus advertising portion from the advertising on shelters/benches section. After
consulting the City Attorney’s Office, the Transportation Department issued Addendum
#1 which suspended the shelter/bench advertising section of RFP #1472 on January
27, 2011. Addendum #1 indicated that a new bid for these services may be released at
a later date. Also Addendum #1 extended the proposal due date for the bus advertising
section to March 3, 2011 with contact award by March 29, 2011.
Staff held a walk through with prospective proposers on January 20, 2011. The
available ad space was summarized in the RFP as follows:
YEAR MANUFACTURER MODEL LENGTH QUANTITY Bus# Available Ad Space
1998 NEW FLYER C40LF 40FT 19 7060 - 7079 ALL (except 7072)
2001 NEW FLYER C40LF 40FT 12 7080 - 7091 ALL
2003 NEW FLYER C30LF 30FT 6 7092 - 7097 ALL
2004 NEW FLYER C40LF 40FT 3 7098 - 7101 ALL (except 7099)
2004 NEW FLYER C40LF 40FT 4 7102 - 7105* TAIL ONLY
2009 NEW FLYER Rapids 40FT 6 7106 - 7111 TAIL ONLY
*(7102 – 7105 are 2004 model year buses and Rapids)
During this timeframe CCB was contacted by Santa Monica’s Big Blue Bus (BBB)
staff who proposed that they manage the bus advertising program. Currently BBB
sells advertising space on approximately 185 buses.
On February 16, 2011 BBB staff made a formal presentation to CCB demonstrating
how their current advertising sales program could be modified to include the sale
and installation of advertising on behalf of CCB. By extending their advertising
program to CCB it would allow a broader reach for marketing on the Westside. BBB
proposed that they manage all aspects CCB’s advertising program including the
sales and installation in exchange for a 30% commission on net advertising sales as
opposed to up to a 50% commission charged by some advertising brokers. They
indicated the estimated annual gross advertising sales would be $411,765 less any
advertising agency discounts (estimated at. $61,765); their commission (estimated
at $105,000); and the costs for posting services (estimated at $50,000). This yields
an estimated annual net advertising revenue to CCB of $195,000.
As a result of staff’s discussions with BBB, the City Manager and the City Attorney’s
Office, staff decided to pursue the possibility of a partnership with BBB. On City of Culver City, California
Agenda Item Report
February 22, 2011, staff issued Addendum #2 which suspended the bus advertising
section of RFP #1472.
Staff believes BBB’s proposal to manage the bus advertising program would be
beneficial to the City. The advertisements would be consistent in content with those
currently being placed on Santa Monica’s Big Blue Buses. CCB would receive
quarterly payments along with the appropriate supporting documentation for all ad
sales. In order to move forward with this program at the beginning of Fiscal Year
2011/2012, the City Council’s approval of the MOU is requested this evening.
Should the City Council provide its approval, staff would issue a Notice to Proceed to
the City of Santa Monica effective Tuesday, June 28, 2011.
FISCAL ANALYSIS:
BBB proposes to extend its bus advertising program to CCB by utilizing its existing
staff. The advertisements would be installed by a company selected by BBB.
BBB has estimated that CCB could potentially generate net revenue of $195,000 in
Fiscal Year 2011/2012; $212,500 in Fiscal Year 2012/2013; and $230,000 in Fiscal
Year 2013/2014.
MOTION:
That the City Council:
1. Approve a Memorandum of Understanding with the City of Santa Monica to
provide bus advertising services;
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to executesuch documents on behalf of the City.